Amid increasing inflow of profit warnings at the Nigerian Stock Exchange (NSE), two tier one banks –United Bank for Africa plc (UBA) and Guaranty Trust Bank plc impressed the markets yesterday with cumulative pretax profits of about N188billion.
These results released Monday at the Nigerian Stock Exchange, show UBA reported profit before income tax N68.454 billion while Guaranty Trust Bank plc coasted with Profit Before Tax of N120.7billion.
United Bank for Africa Plc – the pan African financial services Group, in its Audited Full Year results for the year ended December 31, 2015 recorded a
10% growth in gross earnings, closing at N315 billion and a 25% growth in profit-after-tax to N60 billion; translating to a 20% return on average equity
Similarly, UBA defied competition and macroeconomic pressures to grow operating income by 10% to a record N205 billion in December 2015; from N186 billion in December 2014.
Following the impressive performance, the board is proposing a final dividend of 40 kobo per share. This brings to 60 kobo, the total dividend for the 2015 financial year. UBA had earlier paid an interim dividend of 20 kobo per share, following the audit of its 2015 Half Year Results.
Phillips Oduoza, GMD/CEO, UBA Plc while commenting on the result said “our 2015 profit is a new high, reflecting the hard work and discipline of our board, Management and Staff in creating value for all stakeholders. We remain committed to growing in a responsible manner that aligns with our vision of building an enduring institution”.
He said the bank’s resilient business model, geographic diversification, proactive strategies, and strong governance created an edge for it through the year. “We will continue to invest in our future whilst managing cost tightly to generate strong returns to shareholders” he assured.
Also speaking on UBA’s financial performance and position, the Group Chief Finance Officer (GCFO), Ugo Nwaghodoh said “amidst macroeconomic volatilities, we leveraged efficiency gains in our business development and operations to grow earnings.
We improved on our balance sheet management and pricing, thus ensuring a strong 19% growth in interest income as well as an enhanced net interest margin of 6.3%. Our improved service delivery and customized offerings helped in growing transaction banking volume, with attendant fee income. Whilst we were exposed to some external cost pressure, we managed to keep our cost growth at 5% (below the average inflation rate of 9% in Nigeria; our core market which represents three-quarter of our operations)”.
He expressed satisfaction at the performance of the bank’s Africa operations, particularly in synergy extraction and pursuit of scale economics to achieve market share and earnings targets.
“Precisely, UBA Africa contributed 24% of our Group’s profit before tax in the 2015, despite the impact of cross-currency depreciation in some of our markets. Whilst our cautious stance on lending in Nigeria moderated the loan book, we recorded a collective 14% loan growth in UBA Africa, as we deepen market penetration and our share of customers’ wallet. Our prudence and discipline in risk asset creation over the past half-decade sustained the quality of our loan portfolio; NPL ratio stabilized at 1.7% with full provisions coverage” he stated
Also, GTBank plc 2015 results show positive performance across all financial indices, reaffirming the Bank’s position as one of the most profitable and well managed financial institutions in Nigeria.
GTBank Group deliv – ered an impressive Profit Before Tax of N120.7billion, an increase of N4.3billion or 3.7% over the N116.4billion reported in December 2014 and Gross Earnings of N301.9billion an increase of 8.4% from the N278.5billion recorded in the same period of 2014. In terms of value creation for its shareholders, the Bank recorded pre-tax ROAE of 31.0% and ROAA of 5.0% respectively.
The Bank’s balance sheet remained strong with 7.2% growth in Total Assets, from N2.36trillion in 2014 to N2.52trillion in the year under review. Loans to customers grew by 7.5% to close at N1.37trillion from N1.28trillion in 2014. Despite the implementation of the Treasury Single Account (TSA) by the FGN, customer deposits remained relatively stable with a marginal year-on-year decline of 0.49% from N1.62trillion in 2014 to N1.61trillion in 2015.
The Bank continued to maintain a disciplined and prudent approach to loan growth in line with its Risk Management framework. The Bank’s Non-Performing Loans (NPL) ratio remained low at 3.21%; up slightly from 3.15% in the comparative period of 2014. Against this back drop of strong financial showing, the GTBank is proposing Total-Year Dividend of N1.77k per share (inclusive of the 25kobo interim dividend paid at half year 2015).
“The proposed dividend is broadly in line with our expectation. These results are broadly in line with our expectations, and crucially, management’s guidance. Although the market will be relieved that the results did not disappoint (especially given the profit warnings from three banks in the last two months), we expect that attention will shift very quickly to management’s comments on its 2016 outlook. Coming into 2016, one of the key concerns the market had was refinancing risks relating to GT Bank’s Eurobond due May 2015. We believe those concerns have now dissipated given the strong signal GTBank sent to the market with its early redemption offer,” according to Olubunmi Asaolu led team of analysts at FBNQuest in their first reaction to GTBank results yesterday.
Segun Agbaje, Managing Director/CEO of Guaranty Trust Bank plc while commenting on the financial results said that the Bank’s financial performance in 2015 is an indication that we have earned the loyalty of our customers and an attestation of the hard work and dedication of our staff, management and Board.
The Group has delivered a respectable Profit Before Tax of N120.7billion despite an extremely challenging business environment in 2015.
He further stated that “As a Bank, we will continue to actively partner with our customers and grow our business in a sustainable manner that is not only driven by profit objective, but with an increased focus on empowering our customers with a view to growing Nigerian economy.
Also, we remain committed to maximising shareholders’ value and delivering superior and sustainable returns whilst actively expanding our franchise in select, high growth African markets where we believe we have a competitive advantage
The Bank has continued to report the best financial ratios for a Financial Institution in the industry with a return on equity (ROE) of 31.0% and a cost to income ratio of 44.4% evidencing the efficient management of the banks’ assets.
Overall, the Bank has enshrined its position as a clear leader in the industry.
In due recognition of the Bank’s leading role in Africa’s banking industry, owing to its bias for world class corporate governance standards and excellent service delivery and innovation, GTBank has been a recipient to numerous awards over the course of the year. They include Best Bank in Nigeria by Euromoney, 2015 Bank of the Year by African Investor and Best Banking Group Nigeria by World Finance.